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Inventory management and fulfillment tend to get a lot of attention in logistics circles, while receiving and put-away—in other words, slotting—are much less discussed. Together, all of these are necessary for the steady flow of products through the warehouse.
Warehouse slotting is the intentional, strategic organization of the inventory in a warehouse or distribution center. Items are arranged to optimize accessibility, picking speed, accuracy, and storage capacity. The overall goal is to make both fulfillment and replenishment as efficient as possible.
To understand the concept of warehouse slotting, look no further than an ordinary kitchen. While a cook could conceivably pile tools and ingredients randomly in cabinets and on countertops, a lot of time will be wasted searching for items. Getting a meal prepared and on the table is not going to be quick or easy. A better strategy is to assign things to a specific place, with the most-used items within easy reach.
This solution is obvious at home, but the same rules apply in a warehouse—albeit on a much larger scale. Warehouse slotting is an essential part of efficient operations, and the stakes are much higher than what to have for dinner.
Warehouse slotting goes beyond simply finding empty shelves or floor space for items as new inventory arrives. It needs to be part of an overall warehouse layout and management strategy that is geared toward finding and fixing inefficiencies.
While the basic concepts of warehouse slotting are easy to grasp, truly efficient slotting is complex and requires collecting data and crunching numbers. Decisions about what goes where consider each item’s velocity, dimensions, weight, grouping, and more. The practice gets more complicated with a larger area, more items, and additional product constraints and requirements.
When a company is small, managers can plot out a rudimentary slotting plan on a spreadsheet. However, once the business (and its number of SKUs) grows, slotting decisions need to be automated. Warehouse management software can help with the task.
Warehouse managers sometimes make a distinction between macro slotting and micro slotting.
Macro slotting refers to optimizing the overall layout of a warehouse. At Infoplus, we simply call this “warehouse layout” and have written about it extensively in our series on small warehouse layout, medium warehouse layout, and large warehouse layouts.
Micro slotting refers to how individual items or pallets are placed in specific locations in the warehouse (from the zone down to the specific shelf). This organization of SKUs and groups is what we mean when we talk about slotting.
Readers may encounter these two terms when reading up on slotting best practices, so it’s important to understand the difference.
Just as an orderly kitchen can simplify meal prep, successful warehouse slotting can make order fulfillment easier, faster, and more accurate. This adds efficiency across the board.
The following results provide some clear justification for implementing slotting for the first time—and for reviewing and overhauling existing slotting strategies:
Warehouse slotting provides an organized environment that optimizes productivity for put-away, picking, and replenishment. These lead to more efficient operations that have the potential to improve fulfillment volume and lower labor costs, both of which will show up in the bottom line.
Warehouse slotting is obviously worthwhile, but how do you go about creating the right slotting strategy? The process involves gathering data on each SKU. The following data points will help in deciding how to slot items appropriately:
This data will inform how you go about your warehouse slotting strategy. Now, let’s cover each item in more detail. For more information on warehouse slotting best practices in your warehouse, take a look at this piece, "8 DC and Warehouse Slotting Considerations for More Efficient Warehouse Operations” published by Cerasis on their blog.
SKUs picked by the full pallet will require a forklift, whereas single pieces won’t. It makes sense, then, to store pallets separately from cases or broken cases (individual units). This way, forklifts can move their pallets without interfering with single-item pickers and vice versa.
Item level and storage also dictate what kind of equipment will be needed for picking (forklift, pallet jack, cart, etc.). Pickers will know which kind of equipment they’ll need simply by the area in which the items are located.
It’s also worth noting that there is a “sweet spot” that is easiest for pickers to see and reach when picking individual items. This area is between the chest and knees of an average person. Slot high-velocity SKUs here on shelves for easiest access. Slower-moving SKUs should be out of the way, with the heaviest SKUs as close to the floor as possible.
How pallets, cases, and individual items fit in the warehouse is a function of the SKU’s cube size and weight. Broken cases will go on shelves. Exact measurements of each SKU are necessary for these slotting decisions.
Special consideration should be given to excessively large or heavy items. Moving these will be more difficult and time-consuming, so choosing a location close to the shipping dock is usually preferable. Cubic velocity is a helpful data point, as it takes both size and location into account, measuring the average quantity ordered over time, product dimensions, and item level.
The general rule of thumb in slotting is, “fast-moving SKUs stay accessible and slow-movers stay out of the way.” A down-forward picking area accomplishes this by keeping popular items close to packing and shipping, cutting down on travel time for pickers.
Most warehouse managers can get some idea of their item velocity using “ABC slotting.” This looks at the number of each SKU ordered over a set period of time—usually 30 days.
The top 50% are designated as “A,” the next 25% as “B,” and the last 25% as “C.” (Seldom ordered items that didn’t make the list during the set time period are flagged with a “D”).
These designations determine the arrangement of items with the “A” items easiest to reach in the down-forward picking area. “D” items are stored farthest away, with “B” and “C” taking up the spaces in between.Special Storage Requirements and Product Affinity
Instead of looking only back at the past chosen time period, warehouse management software uses predictive analytics to project future needs. Barbecue grills and patio furniture sell like hotcakes in the spring and early summer. Boots and snow shovels sell a lot faster in fall and winter. By studying market trends and seasonal spikes, managers can get a much clearer view of the SKU velocity to come and slot items accordingly. (Our Allen Brothers case study is a good example of predicting and accounting for seasonal variations.)
Finally, items need to be grouped together into zones based on their specific storage requirements. Some examples:
These special storage requirements will determine where items are slotted. When there are no specific requirements, zones can group together items that are frequently ordered together, also known as “product affinity”. For example, slot shampoo, conditioner, and other hair products in the same zone. Or store razors, shaving cream, and beard-trimming tools together. Since shoppers might order a few different products in these categories at the same time, grouping them together creates a shorter pick path for workers.
Warehouse slotting is an essential component of warehouse operations. It keeps the space organized and efficient, allowing employees to do their jobs more effectively, with less wasted time and effort. While the concept and its benefits are easy to understand, putting it into practice is difficult without the right tools.
Infoplus warehouse management software takes on the task of gathering, organizing, and analyzing the data from SKUs, order history, and picking levels, then creating a slotting plan that makes sense. Infoplus can also take those insights a step further by providing recommendations for pickpaths, rack labeling, and other aspects of inventory management.
When it's time to assess or revamp your company's approach to warehouse slotting, get in touch with our team.
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